Govt avoids Rs16 billion claims by supplying local gas to two fertiliser plants

The government has avoided Rs16 billion in price differential claims by supplying locally produced gas to Agritech and Fatima Fertiliser instead of imported liquefied natural gas, The Express Tribune reported. 

The Economic Coordination Committee approved indigenous gas supply for the two fertiliser plants and directed that the benefit of cheaper gas be passed on to farmers.

The Ministry of National Food Security and Research informed the committee that Pakistan has 10 operational urea plants with a combined annual capacity of around 6.6 million tons, enough to meet local demand if gas supply remains uninterrupted.

Agritech and Fatima Fertiliser, which rely on Sui Northern Gas Pipelines Limited, have a combined annual capacity of 900,000 tons. Since October 2018, the two plants have depended on re-gasified liquefied natural gas due to the unavailability of domestic gas.

The ministry said continued operations of SNGPL-based urea plants since April 2023 helped build buffer stocks of more than 300,000 tons per month and brought urea prices down to Rs4,361 per 50kg bag from Rs4,705 in July 2024, a decline of 7.3%. During the same period, international urea prices rose 38.9%.

For Rabi 2025-26, total urea availability was estimated at 4.28 million tons against demand of 3.42 million tons. However, the committee was told that closure of SNGPL-based plants and the FFC Port Qasim plant during Kharif 2026 could cause a production loss of 718,000 tons by September 30, 2026, creating a possible shortage after July 31.